Satya Nadella has been promoted from executive vice president of the cloud and enterprise group, a role he was promoted to in July last year by departing CEO Steve Ballmer.
Bill Gates is stepping down as chairman of Microsoft's board, and taking on the role of technology advisor.
“During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,” said Bill Gates in a statement. “Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth.”
Mr Gates will support Mr Nadella "in shaping technology and product direction", Microsoft said.
John Thompson, who led the search for the new CEO, will take over Mr Gates' job as chairman of the board.
